Volvo's compact 40-series model line launches with a crossover SUV.

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The world is in no way short of premium compact SUVs. Still, Volvo believes there’s space at the watering hole for at least one more. The new XC40 launches in the United States in the first quarter of 2018 as the company’s third model line. It also marks the debut for the new Compact Modular Architecture, which will go on to underpin all of Volvo’s 40-series cars as well as the portfolio of Geely sub-brand Lynk & Co.

The XC40 is designed to appeal to a younger audience than Volvo’s more grown-up offerings, with exterior styling credited to Ian Kettle, a 31-year-old Brit whose proposal was accepted in 2013 when he was just a year out of the prestigious Royal College of Art design school. While there is a strong family resemblance to Volvo’s bigger SUVs, it’s not meant to be a little brother; distinctive XC40 details include an upswept rear side window, a clamshell hood, and the sort of plastic wheel-arch cladding that has become visual shorthand for a crossover in recent years. At 174.2 inches long, it’s 10.4 inches shorter than the XC60 but, at 65.2 inches high, just 0.1 inch shorter, with a wheelbase of 106.4 inches, down 6.4 inches from the 2018 XC60. It has been designed for big wheels, with 17-inchers the smallest standard fitment and up to 20s offered as dealer options.

Engineering is conventional. The XC40 has steel bodywork—including its liftgate and hood—and uses a strut front suspension and a multilink rear setup. Two powertrains will be available from launch in the United States, both using Volvo’s turbocharged 2.0-liter four-cylinder engine. The entry-level T4 will be front driven, and the brawnier T5 will have all-wheel drive via a part-time Haldex clutch on the rear axle. Volvo said the T5 will have 250 horsepower and 258 lb-ft of torque but hasn’t released a power output for the T4—although, based on the other models wearing a T4 badge, this should be around 200 horsepower.

An eight-speed automatic gearbox will be standard in the U.S.; there are no plans to offer the manual gearbox that lower-powered versions will get in other markets. Nor will we see the 180-hp 2.0-liter diesel that will be sold in Europe. A hybrid using the three-cylinder gasoline engine and dual-clutch gearbox that Volvo told us about last year will follow shortly afterward, and the company also said it will produce an electric version later.

Two trim levels will be available from launch, although the official line is not to think of these as conventional trim levels. Each gets its own selection of exterior color choices as well as generous standard equipment. The cheaper Momentum version will have the option of a white roof as well as—for the truly fashion forward—white mirror caps and white wheels. The marginally more expensive R-Design will have a gloss-black roof as standard and some sportier exterior details, including prominent exhaust tips. A range-topping Inscription model will be added later.

Inside, the XC40 is more radical. All versions will come with a 12.3-inch digital instrument cluster as well as the same 9.0-inch portrait-oriented touchscreen fitted to the bigger XC60, with a similar degree of connectivity including Apple CarPlay and Android Auto as standard. Interior trim materials include textured plastic trim on the door panels and felt in the door pockets. On the preproduction cars we saw, the dashboard panel featured an embossed pattern based on a map of the Gothenburg area.

Storage space is generous and includes a pop-out trash container between the front seats and a space designed to hold a box of tissues. “Cupholders should be for cups,” said Jonas Engström, Volvo’s 40-series product boss, explaining why the company has created so much additional space. Rear-seat space is adult viable, but the rising beltline will make it hard for smaller kids to see out. According to Kettle, this is an indication that the design team is aiming the XC40 primarily at those who have not yet started families. Cargo space is a respectable 16 cubic feet—millennials shop at IKEA, you know—with a load floor that can accommodate the parcel shelf underneath it when the shelf is not in use. The XC40 also has exceptionally spacious front-door pockets, a result of having no low-mounted speakers. Instead all versions will use what Volvo calls an “air woofer” within the dashboard to deliver low frequencies, which is augmented by smaller, high-mounted tweeters.

A predictable emphasis has been put on safety. All XC40s will have automated emergency braking and pedestrian detection as part of a collision-avoidance system that works at speeds up to 40 mph. This also includes oncoming-lane mitigation, which will actively steer the car back to the correct side of the road in the face of approaching traffic. An optional IntelliSafe system includes Volvo’s semi-autonomous Pilot Assist, which can work up to 81 mph, and a rear cross-traffic alert system that will automatically brake if it detects an approaching vehicle when backing out of a parking spot.

As with its Lynk & Co sister cars, Volvo is planning to offer the XC40 with an enhanced leasing scheme known as Care by Volvo that is described as a subscription model. We’re told this may ultimately include shared ownership or the ability to rent a car to other drivers, but initially it’s likely to be a single-payment model that will include insurance, maintenance, repairs, and an enhanced concierge service aimed at those who suffer from the modern affliction of time poverty.

Pricing will kick off at $34,195 for the front-wheel-drive T4 Momentum, which will not be available until later in 2018, and $36,195 for the all-wheel-drive T5 Momentum, which will reach U.S. dealers early in the year; the R-Design trim adds $2500 to either model. All XC40s will be produced at Volvo’s Ghent plant, giving another potential answer to the challenge of naming good things that have come from Belgium beyond waffles and fictional detectives.